Moving today

DKS -3.3%, NKE -2%, FL -1.8%, LULU -1.8% (in sympathy with UAA)

V -1.7% (in sympathy with MA)

DCIX +13.4% (possibly DRYS sympathy)

J. Crew: (JCG) Earnings Preview

Secondary plays: LTD, CACH, BEBE, GES, TLB, AEO, ANN...

JCG is expected to report Q4 earnings after the market closes followed by conference call at 4:30pm ET...

JCG Consensus: First Call consensus is Q4 EPS of $0.39 on revs of $400.85 mln; Q1 EPS of $0.46 on revs of $331.54 mln; FY08 EPS of $1.52 on revs of $1.34 bln; FY09 EPS of $1.83 on revs of $1.51 bln...

Expectations: Co beat earnings estimates (on 11/29) by $0.06 last qtr. The stock gapped up ~10% and closed up ~18%... Since becoming a publicly traded co in 2006, co has never missed earnings estimates (on avg beaten by $0.06) and revs growth has remained above 13% YoY... Gross margin (estimates for Q4 is 41.00%, FY08 is 43.98% and FY09 is 44.25%) will be key issue with most retailers using increased holiday promotions to boost store traffic and sales...

Briefing note: Short interest is 25%, mkt cap is $2.51 bln, float is 10.5 mln and avg volume is ~1.2 mln. Due to the moderately high short interest, any upside guidance could send shares higher... Co has a slightly higher P/E value ~22.2 than its competitors (for comparison, some competitors' forward P/E values: LTD 11.9, CACH 14.6, BEBE 14.9, GES 16.9, AEO 11.2, ANN 12.8)...

Areas of Focus on the Call: 1) FY09 outlook 2) Gross and operating margin (gross margin estimates or Q4 is 41.00%, FY08 is 43.98% and FY09 is 44.25%, last qtr gross margin declined driven by a 90 basis point decline in merchandise margin and partially offset by a 10 basis points in buying occupancy leverage... Co was one of the few retailers that cleared through holiday merchandise quickly, allowing it to set new spring merchandise in mid-Dec, likely helping margins and reducing markdown risk in 4Q) 3) Update on direct business growth (direct business is the co's most profitable segment and created incredible leverage last qtr) 4) Update on inventory controls (last qtr despite fears of warmer weather creating inventory overages, inventories were up only 12%, attesting to mgmt's conservative planning, timely markdown cadence and strong product demand)...

Recent price movement: After reporting last qtr on 11/29 (beat earnings estimates by $0.06 last qtr), stock gapped up ~10% and closed up ~18%. The stock is now trading down ~16%... Note the stock made a new 52-week low (~33.69) on 11/2, but has since rebounded trading ~19% higher off this 52-week low...

Talbots /TLB) Earnings Preview

Secondary plays: LTD, ANN, DDS, M, CACH, CWTR, CHS, NWY, DBRN, JCG...

TLB is expected to report Q4 earnings 3/12 before the market opens followed by conference call at 10:00pm ET... T

LB Consensus: First Call consensus is Q4 EPS of ($0.24) on revs of $587.00 mln; Q1 EPS of $0.02 on revs of $570.06 mln; FY08 EPS of ($0.56) on revs of $2.29 bln; FY09 EPS of $0.16 on revs of $2.30 bln...

Guidance: Co issued downside guidance on 2/6 after reporting Q4 same store sales of -6.0%, co sees Q4 non-GAAP EPS of ($0.23)-($0.28) vs ($0.24) consensus; revs of $587 mln vs $587 mln consensus. The stock opened nearly unchanged and closed up ~3%...

Expectations: Since 1999, co has missed earnings estimates once (usually reports fairly close or within a few cents to estimates). Gross margin (estimates for Q4 is 29.11%, FY08 is 32.28% and FY09 is 33.69%) will be key issue with most retailers using increased holiday promotions to boost store traffic and sales...

Briefing note: Short interest is 39%, mkt cap is $421.73 mln, float is 8.95 mln and avg volume is ~850k. Due to the high short interest and the fact the stock has been beaten down ~80% since reporting last qtr, any upside guidance could send shares higher...

Areas of Focus on the Call: 1) FY09 outlook 2) Gross and operating margin (gross margin estimates for Q4 is 29.11%, FY08 is 32.28% and FY09 is 33.69%) 3) Update on strategic business review (expected to be completed in Q1 2008)...

Recent price movement: After reporting last qtr on 11/27 (beat earnings estimates by $0.05 last qtr), stock had little reaction. Since reporting last qtr the stock is trading down a huge ~80%... Note the stock made a new 52-week low (~6.48) on 1/15, but has since rebounded trading ~20% higher off this 52-week low...

Urban Outfitters (URBN) Earnings Preview

Secondary plays: ANF, BEBE, PIR, AEO, GPS...

URBN is expected to report Q4 earnings 3/6 before the market opens followed by conference call at 9:00am ET...

URBN Consensus: First Call consensus is Q4 EPS of $0.29 on revs of $462.56 mln; Q1 EPS of $0.21 on revs of $382.83 mln; FY08 EPS of $0.92 on revs of $1.51 bln; FY09 EPS of $1.16 on revs of $1.82 bln...

Guidance: After releasing same store sales results on 2/7, co preannounced Q4 revs, sees Q4 (Jan) revs of $465.41 vs. $462.56 mln First Call consensus. The stock traded up ~8% and since is trading another 9% higher...

Expectations: Since Q3 2002, co has beat or reported in-line earnings every time except once (only missed by $0.03 at most). Gross margin (estimates for Q4 is 38.44%, FY08 is 37.92% and FY09 is 39.48%) will be key issue with increased holiday promotions to boost store traffic and sales. Note the co has heavy exposure to the holiday period with ~30% of annual sales expected to be represented by Q4 period...

Briefing note: Short interest is 18%, mkt cap is $4.8 bln, float is 117.29 mln and avg volume is 3.8 mln. Co relatively high forward P/E of ~25.5 (for comparison, some competitors' forward P/E values: ANF 13.1, BEBE 14.9, AEO 11.2, GPS 16.7)...

Areas of Focus on the Call:
1) FY09 outlook
2) Gross margin (estimates for Q4 is 38.44%, FY08 is 37.92% and FY09 is 39.48%, could be margin upside as the firm continues to believe that operating margins of 20% are likely over time)
3) Update on Anthropologie and Free People brands...

Recent price movement: After reporting last qtr on 11/8 (beat EPS estimates by $0.02), stock barely reacted and closed nearly unchanged. Since reporting last qtr, stock is trading up ~18%; since preannouncing revs on 2/7, stock is trading up ~9%. Note the stock made a new 52-week high (~31.32) on 2/26 and is trading ~6% off this 52-week high...

H & R Block (HRB) Q3 Earnings Preview

Secondary Plays: INTU, JTX...

HRB is expected to report 3Q08 earnings 05/03 after the close with a conference call to follow tomorrow at 8 AM ET...

HRB Consensus: 3Q08 EPS street expectation of $0.06, revs of $1.000 bln; FY08 EPS of $1.29, revs of $4.274 bln...

Guidance: In an earnings release on 12/11, the co reaffirmed FY08 EPS guidance of $1.30 to $1.45 from continuing operations (in line with $1.36 street consensus at the time). However, given that the co expects to incur incremental borrowing costs, it believed earnings will be toward the lower end of the guidance range...

Analyst Expectations: Heading into earnings, analysts are not expecting a strong quarter from HRB, as there has been a slow start to the tax season. However, because of the slow beginning to the tax season, firms are expecting the co to raise FY08 guidance. And while analysts anticipate the co to announce mortgage related writedowns, they do not believe they will be substantial...

Areas of Focus on the Call:
1) Tax Season traffic -- AMT patch legislation has slowed the start of the tax season. Co has not adjusted guidance in regard to legislative impact;
2) OOMC division sale -- Co is expected to complete the sales of the unit soon, uncertainty remains on the amount it is to be sold for. The co is also expected to provide writedowns related to the division;
3) Continuing restructuring progress - Co announced plans to reduce headcount and overhead by $110 mln on 1/31...

Coldwater (CWTR) Creek Earnings Preview

Secondary plays: SHOO, KSWS, DECK, NKE, SHOE, BKRS...

CWTR is expected to report Q4 earnings 05/03 after the market closes followed by conference call at 4:45pm ET...

CWTR Consensus:First Call consensus is Q4 EPS of ($0.19) on revs of $358.29 mln; Q1 EPS of ($0.03) on revs of $295.01 mln; FY08 EPS of ($0.03) on revs of $1.16 bln; FY09 EPS of $0.13 on revs of $1.29 bln...

Guidance:On 1/14 co lowered guidance, sees Q4 EPS to ($0.20)-($0.16) vs ($0.19) First Call consensus (down from prior guidance of $0.00). Co also sees comparable store sales for Q4 of 2007 are expected to reflect a decrease of mid- to high-teens versus the prior year level. The stock is gapped down ~20% and closed down ~25% following this guidance. The stock has since rebounding and is trading ~36% higher...

Expectations

: Since 2001, co has missed earnings only once (and only missed by $0.03). Revs growth for Q4 YoY has been >20%. Gross margin (estimates for Q4 is 31.75%, FY08 is 39.72% and FY09 is 40.17%) will be key issue with increased holiday promotions to boost store traffic and sales...

Briefing note

: Short interest is 16%, mkt cap is $494.36 mln, float is 77.08 mln and avg volume is 900k. Co has extremely low forward P/E of ~9.2 (for comparison, some competitors' forward P/E values: KSWS 19.4, DECK 21.8, NKE 15.7)...

Areas of Focus on the Call:1) FY09 outlook (co issued grim Q4 outlook on 1/14 but has yet to issue any guidance for this year, guidance is expected to be conservative for Q1 and full year)
2) Gross margin (gross margin estimates for Q4 is 31.75%, FY08 is 39.72% and FY09 is 40.17%)
3) Commentary on economic sensitivity of customers 4) Update on wholesale division turnaround...

Recent price movement

: After reporting last qtr on 11/28 (beat EPS estimates by $0.04), stock barely reacted and closed near unchanged levels. Since reporting last qtr, stock is trading down ~36%. Note the stock made a new 52-week low (~3.40) on 1/22, but has since rebounded trading ~36% higher off this 52-week low...

NCR 9% in sympathy

United Technologies (UTC) proposes acquisition of Diebold (DBD) for $40/share in cash.

ATM manufacturer NCR Corporation (NCR) is trading up 9% in sympathy, DBD +64.2%.